2021 February Money Tips

Hi everyone, 

Hope you are all healthy and well! 

1. Tax season is almost here. Canada Revenue Agency (CRA) will start accepting e-file on February 22nd. It is preparing itself for the 2021 Tax Season and thus there is limited service available on their website. Also, if you have ever tried calling them lately, wait time is long. If you have any questions, I recommend you try to do your research first, before calling them. If you do call them, ask for the agent's ID number and ask for a website reference for their answers (because sometimes they can be wrong too); and that's your tip #1 for this February. :)

2. There is so much publication (ads, talks, etc.) about TFSA vs RRSP now that the March 1st deadline is drawing near. Here's my opinion from a tax point of view: if you are not in the lowest tax bracket, contribute to your Registered Retirement Savings Plan (RRSP). You will get a tax refund which is the tax portion of the money you put into your RRSP. When you withdraw your RRSP, you will have to pay back those tax dollars. This is just one point of view. Discuss with your financial advisor who knows your overall financial situation, to help you decide on what's best for you.

3. If you are in the lowest tax bracket already, utilize the Tax Free Savings Account (TFSA) if you are 18 or older. However, if you are a non-resident for tax purposes, do not contribute to TFSA because you will be subject to a 1% per month penalty. If you are in BC, you need to be 19 before you can open a TFSA account. However, you will be able to do a two-year contribution to catch up (for the year you turned 18 and 19).
Source: https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/tax-free-savings-account/who-open-a-tfsa.html   


4. Did you know that you are eligible for GST credit when you turn 19? Make sure you file your taxes for the year you turn 17 (if your birthday falls between January to March)  or 18 (for all other months) so you don't miss your payment. 


Feel free to share these tips with others. Don't forget that I'm running a series of webinars this month! Check out my homepage for details.


Photo by Jason Leung on  Unsplash